Question

At the end of 2020, Oriole Co. has accounts receivable of $775,800 and an allowance for doubtful accounts of $71,100. On January 24, 2021, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $7,200. On March 4, 2021, Oriole Co. receives payment of $7,200 in full from Megan Gray. Prepare the journal entries to record this transaction.

Answer 1

January 24, 2021 (write off)

Dr Allowance for Doubtful Accounts account 7,200

Cr Accounts Receivable account 7,200

March 4, 2021 (write off reversing)

Dr Accounts Receivable account 7.200

Cr Allowance for Doubtful Accounts account 7,200

March 4, 2021 (record collection)

Dr Cash account 7,200

Cr Accounts Receivable account 7,200